Transcript Macroeconomic Environment for Development: SADC Region

Macroeconomic Environment for
Development: SADC Region
Dr. A. Mondlane
SADC SECRETARIAT
22 March 2010
The SADC Region was mainly affected by the
secondary effects of the Global Economic
Crisis
2006
2007
2008
Inflation (excludes Zimbabwe)
8.5
8.8
13.9
GDP (%)
6.8
7.4
5.9
Real Per capita GDP (%)
4.3
4.7
2.4
Fiscal balance (% of GDP)
3.0
1.1
1.1
Public Debt (% of GDP)
52.7
48.4
23.7
Current Account (% of GDP)
-2.1
-3.7
-8.4
Reserves (months of Imports)
4.6
4.8
4.1
Note: Public debt for 2008-2010 excludes domestic debt.
2009
12.8
0.1
-1.2
-4.1
26.2
-10.5
4.6
2010
7.7
3.9
2.5
-5.6
25.8
-12.3
4.2
Cont’d
• The region’s real GDP increased marginally by
an estimated 0.1 per cent in 2009 down from an
increase of 5.9 per cent recorded in 2008
– As a result of the depressed economic growth, the
positive trend in per capita income recorded since
2006 was reversed in 2009.
– Growth in per capita income was estimated to have
declined by 1.2 per cent in 2009.
• The rising food and fuel prices of late 2007 and
2008 resulted in high inflation for the region, i.e.
above the targeted single digit.
– Inflation has since slowed down but still in double digit
by close of 2009.
Cont’d
• Declining demand on the international market
affected exports of the region.
– The current account deteriorated due to unfavourable
terms of trade.
– Foreign reserves declined due to low exports and as
countries drew down their reserves to complement
falling government revenues.
• With falling economic growth and exports,
government revenues were affected resulting in
widening fiscal balances which were partly offset
by borrowing as indicated by increases in
external borrowing.
Cont’d
• Prospects for 2010 look assuring with most of
the indicators expected to improve.
• The challenge for the region remains the need
for:
– Diversified economies
• Additional sectors that are flexible to complement the
traditional sectors.
– Improvements in productivity in the existing sectors
(agriculture).
– Skilled labour force that can add to improvements in
productivity and generate new sectors even in the
event of a crisis.